Slashdot Mirror
SBC's VoIP End Run
Chris Holland writes "Right on the heels of a positive FCC regulation preventing individual U.S. States from levying taxes on VoIP communications, SBC, according to Om Malik, appears to have brought to a quick end the 'lets not pay any termination fees' party that had VoIP upstarts drunk. Jeff Pulver is also sharing his take."
This is getting silly now. Surely VoIP is inherently uncontrollable? Isn't MSN's voice chat a form of VoIP? Isn't Skype?
Nobody is going to charge me termination fees for them are they? Come on, it's like trying to regulate HTTP trafficm it simply cannot be done. The network will find a way round anything it percives as 'damage', and if a certain technology is suddenly being charged for it isn't that hard to find another one.
How many people can read hex if only you and dead people can read hex?
This coming on the same day they banned a tax on internet service and shoppingr net.html
http://www.nytimes.com/2004/11/20/politics/20inte
Great news for the web
Business Voyeur
Given that one of them is just an IP address it can't be long before it falls over...
How many people can read hex if only you and dead people can read hex?
All of this is reality if you are on SBC's network, but what if you have cable, wireless or the newly opened Broadband over Powerline available? It's a free market and it's not as if SBC is the only provider! SBC has to be competitive. I think this could drive business away from them.
I don't know how VoIP works now, so may be someone can explain what exactly SBC is planning here, but...
Say, I have an appliance in my house which connects to the net and sends encrypted traffic to some server somewhere out there using one of the standard protocols and ports (https, or one of vpn protocols). Said appliance happens to me by internet phone, and the encrypted traffic carries voice. The server could be that of Vonage, or Vonage could contract with some big VPN provider or some other third party as well. What is SBC going to do? Trottle down all SSL/https, and all VPN? Unlikely. Figure out which ones are Vonage's? Can be pretty hard, they all look the same, that's the idea.
Now, if Vonage currently does not do it and sends voice unencrypted or using some easilly identifiable dedicated ports or protocols, this is bad ofr many reasons, mostly it's bad for us users, but now it's bad for Vonage too, so may be they will change it to a more secure protocol. That would be good for everyone.
Our toothless FCC and SEC will do nothing because they are lead by people who believe that regulation is, in and of itself, a very bad thing. Michael "the Market is my God" Powell is about as likely to stop the Bells from squashing the competition as George Bush is to announce that he's in favor of gay marriage. Naturally there will be people who will claim that this can't stop the bold VOIP companies, but they'll be wrong. If the Bells can charge exhorbinant rates for call termination it'll put Vonage, Packet 8, and the rest out of business in a year.
It is possible that massive public outcry could change things and force even Michael Powell's FCC to stop the Bells. I wouldn't count on it though...
"Mission Accomplished" -- George W. Bush May 1, 2003
"All of this is reality if you are on SBC's network, but what if you have cable, wireless or the newly opened Broadband over Powerline available? It's a free market and it's not as if SBC is the only provider! SBC has to be competitive. I think this could drive business away from them."
And how many markets is that true in? Also monopolies aren't "free market", be it no competition, or lots of government regulations.
How is this going to affect Skype? I just now started using it under Mac OS X to call from my Mac in the United States to my sister's landline in Turkey and it ROCKS. I hope this doesn't ruin the wonderful experience I've had so far.
I get both phone and Internet over the cable TV
network, but no TV! (they look at me like I have
two heads or something)
It's cheaper this way.
"Our toothless FCC and SEC will do nothing because they are lead by people who believe that regulation is, in and of itself, a very bad thing."
And just were do you think they got that message from? How many times have we signed onto Slashdot and heard a rant about "government sticking it's nose were it doesn't belong"? Or "Government, GET OUT!". Face it, people are getting what they asked for, and they're finding the fruits bitter indeed.
"It is possible that massive public outcry could change things and force even Michael Powell's FCC to stop the Bells. "
Why should they? The libertarian platform was built upon small government.
Currently I believe VOIP provides interconnect with the landline telephone network by means of CLECs, at least where they can. Presumably the CLECs charge them less than the BOCs. SBC may be introducing a tariff to compete with the CLECs for the VOIPs interconnect business.
Many overlooked the fact that Cisco bought a company called P-Cube recently. One of the things P-Cube can do is prioritize the traffic flows on an IP network. SBC could use it and lower the priority of the traffic coming from say Vonage or AT&T. Nothing illegal here: SBC's network and it can do pretty much what it wants on its own network. Poor quality, lags, dropped packets and soon Vonage customers could be switching to SBC VoIP: which is more expensive, has better quality and of course is highly profitable.
Actually, it *is* illegal to directly interfere with a competitor's business. SBC would be criminally liable if they tried to prioritize the traffic of their competitors.
#naabhaprzrag, #sverubfr-000, #agi-fcbafberq, negvpyr[pynff*=' negvpyr-ary-'] { qvfcynl: abar !vzcbegnag; }
Vonage should just charge SBC a "termination" fee if their customers call vonage. In the end with everyone switching to VOIP anyway, it'll just result in the classic companies fading out faster.
Cheers,
TdC
While companies like Qwest (Old US-West) are embracing the technology. Qwest's CEO has been vocal about their plans to compete head-to-head against the startup VoIP companies. To put their money where their mouth is, Qwest explicitly agreed to let any VoIP service terminate traffic in the Qwest local markets without paying termination charges. Just the exact opposite of SBC...... Why the 180 degree polar opposite decision by two of the largest telephone companies in the country? IMHO, Qwest is embracing VoIP themselves while SBC is late to the game, again. SBC seems to come up dead last in any data or telephone technology. What else to do but try to slow down all the competitors.
Termination chargges are not all bad, but to try to apply them to VoIP is insane for all the reasons other posters submited.
Termination charges are good for collecting taxes like the universal service fund. That tax ensures that people in rural areas, where it is much more expensive to deliver service, are subsdidized. IMHO, not all that bad of an idea if done within reason.
But the "right" way to charge termination fees is on the "data" pipe that is used to deliver content. NOT on the services on that data pipe. As for SBC wanting to get reimbursed for the cost of calls that they terminate to SBC subscribers..... Doesn't SBC already charge their subscribers a monthly fee? Do they really need to collect money on both ends?
Does all this means that future Skype communication prices are going to be higher than currently prices ?
This is nothing new. LEC's have been paying each other for access to their networks ( terminating LD calls ) for years. Carrier access billing is a decent profit center in and of itself!
From CarrierAccessBilling.com:The Federal Communications Commission (FCC) mandates that all telecommunications carriers whose facilities are used to provide long distance service are entitled to a share of the compensation paid for that service. This revenue helps the local company to provide facilities over which the long distance company can provide calls to its customers.
If VoIP companies are going to offer telco services, they should *embrace* this form of compensation, and turn around and bill SBC for their customers that call the VoIP subscriber of said company.
I hope you are enjoying this. Back when it was stylish and in vogue to pile on AT&T with the thoughts of AT&T being the "Big, Bad Monopoly" (though highly government regulated), we had one communications structure - well defined and orchestrated for its time. But of course there were the people served by the Great Telephone Experiment (GTE) that never could get it right. Yes, AT&T had their problems but when my phone was out, problems were fixed the first time out. Now, no one knows what to make of this morass called wireline telecommunications. YOU let the genie out of the bottle and now we have to sort through this mess and the "The $ is King" Federal Clueless Commission just rubber stamps proposals without really using their brains to understand what their decisions mean. I will bet a wooden nickle that these decisions by the FCC are being done to featherbed their pockets for when their time is up at the expense of the users. So, now it is time to direct the frustrations toward the Southern Boys Club and it is well deserved!
Am I bad because I just don't care? How many different residential 'solution providers' do I really need? Is the potential savings really worth the effort that it would take me to choose which the best VoIP provider would be?
I got cable/hdtv/broadband modem/telephone all coming into the house on one wire, and all being paid for with one bill. One phone number to call for customer service. Simple, I like it. And I don't have to waste any time checking to see who's lowered their prices or added new features.
Thank gawd for our Longstanding Telecom Overlords!
I can just sit back, know I'm not getting the absolute best service at the absolute best price, accept the fact that I'm getting boned, understand that there is nothing I can do about it, and not have to worry about the $5/month I might save or the one extra feature (that I'd never use) that I could have if I changed providers.
Which lets me spend more time on my crack style net porn addiction.
Wake up.
Vonage and the likes already have momentum. Asterisk and the likes are in position to take over the PBX market. Connect the two automaticly, along with various other networks, and there is enough mass to solve this. Aunt Mary might not understand it now, but when all her relatives tell her to get off SBC because she is the only one in the world(!) they call where they have to pay fees, and she will be forced to listen. Once Aunt Mary realizes that she can call pretty much everyone for less on her VOIP phone, she drops SBC as an extra bill that she doesn't need.
Soon SBC and the like will file for bankruptcy... Not really, they do have DSL, which is a good way to connect. When the notice that customers are switching to Cable internet just to avoid having to pay for an unused voice line, they will drop that all voice/DSL bundling requirements.
As geeks it is our responsibility to socity to make sure it happens. So start your own VOIP expiriment at home, and use it once in a while. Long distance telephone is obsolete, but nobody has realized it yet.
I know at least two people that struck it seriously rich with this as their only real source of revenue - they could sell to their customers at near cost because their customers were the destination for calls from Bell customers.
Ah, if only it were still 1997. :)
[Set Cain on fire and steal his lute.]
When the Bells were originally forced to open their networks to competition by the '96 telcom act, they lobbied for and recieved a concession called Recipricol Compensation. When the ILECs (SBC, et. al.) and newly created CLECs interconnected with each other's networks, each party would pay the other to terminate calls on the other party's network. This was done so that CLECs could not go after the high volume, profitable, business customers without sending a significant chunk of the profits back to the ILECs in the form of Recipricol Compensation.
Then along came the internet, and all of a sudden the traffic flow to CLECs was completely reversed! Now, instead of making a lot of calls, the largest customers were *recieving* a *lot* of calls, and they were lasting longer (Recip. Comp. is billed by the minute). All of a sudden, SBC decided the old system wasn't fair and that it needed to be changed. They removed the old system from their new InterConnection Agreements (ICAs) with CLECs to the best of their regulatory abilities, and eventually mostly succeded in stopping these payments to CLECs. SBC decided the regulation was no longer fair because it was no longer in its best interest! Now, when the situation has swung the back other way with VoIP, they're trying to change the rules again. It's no surprise they'd try, but what's sad about our political and regulatory systems is that, at least in the medium term, it's probably they'll get their way.
As someone who's facinated by Economics and a big fan of fair and open markets, the current situation with the former Bells seems intolerable. The '96 act has failed to create a truely competitive market in telecommunications because it relied too hevily on the Government's ability to come up with good, fair regulations, and the ILECs good behavior in obeying them. IMHO, what needs to happen is new federal legislation forcing divestment of the ILECs last mile infrastructure and tandem (interconnection) switches from their retail sides. The new entity would retain the monopoly on the physical infrastructure, but be highly regulated- prohibited from selling directly to consumers, price controlled, and would be forced to treat all carriers equally. The retail side would have to compete on a level playing field with everyone else. This situation wouldn't be perfect, but it would be better than what we have today. Look what happened with long distance once the market became competitive! Compare rates 10-15 years ago with those of today. I remember paying $0.25/min for a long distance call of less than 100 miles, and today I can buy *unlimited* local and long distance anywhere in the country for $25/mo through Vonage- less than the local line alone from SBC.
The situation we have now seems to be headed back to a private entity extracting monopoly rents for a vital infrastructure, which IMHO is even worse than state control. Even with all the barriers SBC is throwing up, some CLECs are making it work- but things seem risky. CLECs need a stable, fair, regulatory environment in order to make the investments that will, in the long run, benefit all of us. SBC has managed to virtually eliminate Recip Comp, change other significant terms of interconnection, and eliminate line sharing. If the regulators continue to let the ILECs have their way, the result will be changing rules that bankrupt existing CLECs and discourage new market entrants.
Sounds like it's time to remove the government-sanctioned monopolies that allow the baby Bells to do this in the first place.
Regulation is the problem, not the solution.
I think you meant to say "protecting their outdated business model", because everytime a VoIP story comes up. People are always commenting on the reliability of that "outdated network" and how 911 is available compared to VoIP(1).
(1) That and the fact that the reliable broadband VoIP needs isn't universal.
The "local telephone switch" would charge fees for anything coming in and coming out. For "shared bandwidth" circuits, which is almost everything but the line to your house, pricing would be based on bit-traffic. In "dedicated-bandwidth" lines like a dedicated copper line to your house, pricing would be based on minutes used and/or bit-traffic, depending on the nature of the switch and whether connection-time or bandwidth was tying up more resources at the switch. This would be on top of a monthly "lease" fee based on the cost of maintaining things like the wires to your house or the floor space of the interconnect equipment.
I say "based on" because in practical terms, customers will probably wind up paying a montly fee based on the expected average useage for that class of customer.
So, if I make a call to someone on the same switch, the telco gets to bill me and the person I'm calling, probably both based on per-minute actual or expected usage.
If I make or receive a call to someone else over traditional long distance, MY telco gets to bill me and my long distance company, and the other guy's telco gets to bill him and the long distance company. I and the other guy would get per-minute billing, and the long distance company would get two bills, both based on bits used.
If I make or receive a call to someoneone else, and he has a cellular or VoIP, and that cellular or VoIP has a termination point at my telco's switch, my telco gets to bill me by the minute and and them by the byte.
In the all-to-common case where one company handles local and long distance, the company must bill itself internally at the same rate it charges outside customers who provide the same service. It's only fair, and it's all but necessary if they want to justify rate hikes for their regulated services. It should also treat "itself" the same as a third-party customer, again, because it's fair.
From there we pile on complicated things like taxes, and figuring out which end-user should pay the final bill (the caller, the recipient, or both), but that's beyond the scope of this reply.
The upshot: local, long distance, cellular, VoIP, the phone company wouldn't care, they'll get their money coming and going.
I'm not naive - the telcos are out to make money, not be "fair" to anyone but themselves. But I can dream can't I?
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
As long as the monopoly is allowed to crush it's competitors through regulation, the consumer looses. As long as the monopoly can crush it's competition through regulation, the competitor and the inovator loose. As long as the monopoly crushes it's competition through regulation, the monopoly, and the government (which requires a stable tax revene to survive) wins.
One idea is to cut out the PSTN all together. There are large chunks of frequency space that is unregulated. Private lines/Cable lines are also the private property of the entities that put them in. With enough penetration the PSTN becomes almost irrelevant. VoIP providers had better start building their network to the customer now, be it wireless, fiber, cable, or 2 cans and a string, if they don't get market penetration quickly the government and the monopoly will simply regulate their business away.
What is sad is that most people don't realize the true price of things. If it wasn't for the monopoly and the government taxes, you phone bill would probably be 10-15 dollars/month with all the local/LD you could eat. If more people realized that point, the political will may exist to force the RBOC and the ILEC to compete. Currently they don't compete, and they don't innovate. They watch other innovate, figure out what they can do, copy it, resell it, all while regulating the competition out of bussiness.
cluge
"Science is about ego as much as it is about discovery and truth " - I said it, so sue me.
Termination is the key word! At some point it must enter a home or office. That's when you get stuck with a "Termination Fee" That will than be passed on to the home owner or business owner. Most likely it will be cheaper to go through SBC directly for your VOIP service to avoid the Termination Fee. Small companies like the one that I work for will be affected by this we love VOIP and will sell it all day-long but with a Termination Fee the savings for our customers will be gone and so will another piece of are business and a few more engineers.
Sig: BEEeeeP,,Please press pound, so I can get on with my fucking life!
VoIP terminating in POTS is still wrong. Of course you have to do it to be able to call people who are not on VoIP. But eventually most people and businesses will have IP bandwidth sufficient to carry all their voice traffic direct. A great many have that now. Then we migrate to "voice IP to IP" and finally put an end to all the nonsense.
... until the spammers and telemarketers team up.
now we need to go OSS in diesel cars
How is this going to affect Skype? I just now started using it under Mac OS X to call from my Mac in the United States to my sister's landline in Turkey and it ROCKS.
That call should be the same - unless/until the local phone company in Turkey does something similar or your VoIP carrier pays for the local cost jump by raising its overall rates.
As I understand what happened:
1) Several decades back, independent long-distance companies were formed (starting with MCI). They took advantage of court decisions and FCC regulations intended to allow attaching telephones and modems manufactured by other companies, rather than renting phones and modems from the phone company at high rates. But they used the equipment they attached to bypass the phone company's long-distance network, selling long-distance at a lower rate. To use it you had to call their local site, enter your user code, and dial the distant number (much like "phonecards" today).
Of course the tellco didn't like this - and the alternative companies wanted to let you opt to use them as your "dial 1" long-distance provider. This went to court, and ended up with a new "tarrif" (set of standards, fees, and requirement that the tellco provide the service) for connecting long distance service to a local tellco.
2) Then the big Bell tellco was broken into AT&T and the Baby Bell local companies (and a few other splinters) to settle an antitrust suit. At this point the Baby Bells (and a few legacy non-bell local tellcos) could provide their own long distance WITHIN their area, but not with their neighbors. All long distance companies BETWEEN the BBs had to go through long-distance players (AT&T, Sprint, MCI, etc.) on an even footing at the special rate.
3) After a number of years of bulldozing it, the courts decided the playing field was level enough, and let the Baby Bells start merging and get back into the long distance game.
4) The VoIP companies have apparently started up getting their termination to PSTN (Public Switched Telephone Network) phones the same way the early long-distance bypass companies did: Instead of paying the fee for connecting the way long distance companies do, they rented some ordinary phone lines and make their calls on those. This is cheaper. It's also not what was intended by the regulations.
5) The tellcos STILL don't like having their own long-distance service bypassed (and its revenue drained) by an upstart that isn't playing by the rules. The pure long-distance companies couldn't do anything but sue to require the VoIP carriers to connect like other long distance operations and pay that fee. But the local companies didn't like the competition either, and tried to define VoIP companies as phone companies providing local service, thus subjecting them to all the regulations and taxes involved (like the 911 service fee). That finally got settled, just weeks ago. The decisions was "hands off VoIP - the Fed won't regulate 'em and prohibits the states from doing so".
6) Next step would be to try to force them to do their local connect like a long-distance carrier or different local carrier, rather than a local phone customer. (This is actually reasonable. But it might also be slapped down after much expensive fighting.)
So SBC came up with a cute alternaitve: They're making a special new service with a price LOWER than that of connecting as a long-distance carrier but HIGHER than a local phone line. They say it's voluntary, that they're offering the VoIP providers a better deal than they give the traditional long-distance carriers, and that they CAN make this offer because VoIP is an internet service and thus NOT regulated. "We're being good guys!".
But the next step, of course, is to disconnect the local lines, claiming that using them to terminate long-distance service is outside the lines' terms-of-service. Or to tweak the service level actually delivered on those particular lines down to the minimum allowed by the tarrif t
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
No, this isn't specifically a voice over IP to IP idea (though that is the ultimate answer). How the P2P part comes in works like this. End users who have broadband or other high speed connectitivity, and a normal (POTS) phone line (and voice card to connect to it), would sign up for this "service" and run the software. When a VoIP call needs to terminate at some local exchange where such a "customer" is present and idle, the call will be made by connecting to the "termination agent" software that "customer" is running, and the call (local only) is made from that customer's phone line. That customer then gets a credit on their VoIP bill for a percentage of the cost of the call, which can be rolled over to the next month, traded online for goodies, or paid out in cash, depending on what the VoIP company can set up.
This concept, in a store and forward form, was the basis of many earlier networks from FIDO to UUCP. And with direct internet connectivity, many do this now with data calls connecting through an outbound modem. And even in the early 1970's a place I worked at was dynamically rerouting phone calls being placed to other cities via various trunk lines they had to that city (it was unused video trunks at the time) just to avoid the long distance changes (the theory was, why pay the phone company for resources that were not being used, and why not use the resources that are being paid for).
now we need to go OSS in diesel cars
"Sorry, don't understand your banter."
Should we organize a boycott of SBC in its coverage areas? They will have trouble staying in business if all their customers use 3rd party local providers (sure they still get the last mile fees, but that is drops in a bucket compared to calling plans sold directly to consumers).
Viral software licensing is not freedom, it is in fact GNU/Socialism.
Hello, i am from spain .In this country there are a slow and expensive connectionns , the princippal company (telefonica) has to duplicate now the speed of the line (256-128 to 512-128) for 40euro (the price does not increast and the line has to new duplicate in march to 1024-??? for 40euro too).
.
In this country the phone line it is for telefonica in much proportion and this companny is in special regulation , telefonica is one of the bad isp around the world
Ok. Look the difference in download\upload 512-128. what is the problem? the problem is the difference in download\upload and this produced an excessive ping (up to 300-500 ms) because all of the dsl of telefonica is bassed on INTERLEAVE-PATH no FAST-PATH, and interleave path was very bad for VOip (and this company does not to change system when the line aument speed)
I do not imagine when the line was new duplicated (the ping is up to 900ms pfffffffffff). The VOip does not like for telefnica.
Sorry my letter and my explication , I wrote this comment from spain and it is possible errors on keyboard or gramatycal expression.
Thank you for this excellent and informative post.
All user taxes should be eliminated and replaced by progressive income taxes and asset taxes. Working class people who make less than 30K should pay zero taxes.
eat shiat and bark at the moon
For the business market, you could really accomplish 90% of the QoS needs by simple egress queuing that gives a lower priority to HTTP, SMTP, and maybe FTP, or a bit more crudely, by just giving a higher priority to UDP and a lower priority to TCP (though there are some database applications running on TCP that can get a bit grumpy about that.) For the home and university market, it's a bit different, because you need to give BitTorrent and other easily-recognized P2P protocols the lowest priority, and it may help to have three queues so you can give VOIP high priority and HTTP medium priority, but that's getting more complex.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
Why did the tone of that article remind me of all the spams I get promoting one stock or another? I rock. You suck. It's just that simple.